Turning Talk into Action: Building Canada's Battery Supply Chain
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May 2021 Turning Talk into Action: Building Canada’s Battery Supply Chain
Individuals and organizations that participated in this process: Warren Ali, Automotive Parts Manufacturers’ Association James Meadowcroft, Transition Accelerator Matt Beck, Battery Metals Association of Canada / David Paterson, General Motors Canada Delphi Group Sarah Petrevan, Clean Energy Canada Daniel Breton, Electric Mobility Canada Frank So, E-One Moli Energy (Canada) Angelo DiCaro, Unifor Soeren Striepe, Magna International Patrick Gervais, Lion Electric Simon Thibault, Propulsion Québec Moe Kabbara, Dunsky Energy Consulting Alain Vallée, Blue Solutions Canada Jean-Christophe Lambert, Lithion Recycling Dan Woynillowicz, Polaris Strategy + Insight Brendan Marshall, Mining Association of Canada Other experts consulted: Wilson Ma, Li-Cycle Liz Lappin, Battery Metals Association of Canada / E3 Metals
Contents
Executive Summary 2
State of Play 3
Purpose & Process 4
A Battery Vision for Canada 5
Challenges to Overcome 7
Focusing on Priority Actions 9
Next Steps 16
Endnotes 17
Photo credit (Cover & this page):
E-One Moli Energy Corporation
2 Turning Talk into Action
Executive Summary
The world’s largest economies are ramping up their climate
ambitions and radically reimagining their economies. Canada
too must not only identify where our strategic opportunities lie
in a future net-zero world—but also take steps today to ensure
those opportunities don’t pass us by.
Canada has a once-in-generation opportunity to establish
itself as a major player in the global battery sector, but
that window will close with or without us.
Why must Canada act now?
Photo credit: Blue Solutions
First is the scale of the opportunity. Driven largely, though
not exclusively, by the rapid growth in electric vehicle
manufacturing, the global market for lithium-ion batteries is 2. Immediately convene an industry-led Canadian battery
expected to grow exponentially over the next few decades, as task force to deliver advice to governments on how to
will demand for the metals and minerals that supply them. develop Canada’s battery industry by the end of 2021.
Second, the benefits for Canada are economy-spanning. With 3. Develop a North American Battery Alliance within the
known deposits of critical metals and minerals, plenty of clean next year to leverage the integrated Canada-U.S. market,
electricity (to power lower-carbon operations), and access to a connect players along the supply chain, and drive capital
well-integrated North American market, Canada can do more investment.
than merely extract and supply the raw materials—we can
be a leading supplier of sustainable battery materials and a 4. Unlock Canada’s sustainable battery metals, minerals,
producer of cutting-edge technology. and materials supply to realize one of Canada’s major
value propositions and attract battery-related investment.
And finally, developing Canada’s battery supply chain will help
anchor our existing auto sector, ensuring we capture the jobs 5. Ramp up Canada’s midstream supply chain capacity
and value created in the transition to electric vehicles. to feed battery materials and components to regional auto
manufacturers.
With Asia and Europe accelerating ahead, North America
needs to catch up—or lose global market share. 6. Launch a dedicated battery supply chain fund to
address challenges and invest in strategic projects along
In the Roadmap for a Renewed U.S.-Canada Partnership the Canadian value chain.
released earlier this year, President Joe Biden and Prime
Minister Justin Trudeau identified the battery supply chain as 7. Better promote Canada’s clean and responsible battery
a collaborative opportunity for our two nations. brand to secure investment and attract OEMs and tier 1
battery producers to locate their facilities here.
But despite actions taken to date, industry stakeholders
felt that Canada is still a long way from having a mature 8. Create a government-funded, industry-led Battery
battery supply chain. Which is why Clean Energy Canada Centre of Excellence focused on commercializing
convened experts across the supply chain—including mining, advanced battery technology and manufacturing R&D.
battery manufacturing, auto parts and assembly, and battery
9. Grow demand for batteries in North America to ensure
recycling—to identify these no-regrets priority actions Canada
there is sufficient demand for EVs, batteries, and their
must take in the immediate-term to establish itself as a player
input materials and parts.
in the global battery industry.
The battery supply chain is a key one for Canada, as
1. Form an intergovernmental battery secretariat to
acknowledged by the federal government in its most recent
enable decision-makers across departments and levels of
climate plan and last month’s budget. But action matters
government to act quickly, nimbly, and in a coordinated way.
more than talk, and more action will be needed to build
a domestic industry.
3 Turning Talk into Action
State of Play
As the automotive industry rapidly transitions to electric
vehicles, the demand for batteries and the metals and
minerals that go into them are projected to take off.1 The
global market for lithium-ion batteries is expected to exceed
$100 billion by 2030.2 According to the World Bank, demand
for minerals like graphite, lithium, and cobalt could increase
by nearly 500% by 2050 in order to supply these batteries and
other clean technologies.3 Photo credit: Automotive Parts Manufacturers’ Association
Currently, 80% of the world’s batteries are produced in Japan,
South Korea, and China. China alone controls the majority of “Of course, we are familiar with
global battery material processing and cathode production,
giving the country significant influence over pricing and supply Canada’s huge base of key battery
chain flows. The COVID pandemic, however, has exposed raw materials such as nickel,
the vulnerability of global supply chains, from local vaccine
manufacturing capacity to the microchip shortage plaguing
lithium, cobalt, graphite, copper and
the auto industry. The United States and the European Union manganese. But the potential to
have flagged their dependence on Asia, mainly China, for add these into high value chemicals,
batteries and battery materials as a major risk to their auto
industries. Both regions are working to restructure supply cathodes, anodes and even engage in
chains and source more batteries and materials from their the production of lithium-ion batteries
own regions—and both regions have identified Canada as a
secure and stable source of sustainable raw materials.4
offers the country a major slice of
this growing lithium ion and electric
The EU in particular has made rapid progress in the last few
years on building a competitive battery industry. In 2017, it vehicle economic pie.”
identified batteries as an area of strategic importance for the
- Benchmark Mineral Intelligence, 2021
region and formed the European Battery Alliance to establish
a complete domestic battery supply chain. Since then, the
Alliance has put forward more than €6 billion to build out and battery map. Further commitments made in the 2021
that supply chain, and the EU has surpassed China as the federal budget and strategic investments by the Government
world’s top market for EVs and top destination for EV-related of Quebec will help grow some parts of the battery supply
investments.5 chain and keep Canada moving in the right direction.11
With at least 15 large-scale battery cell factories currently under But more action is needed to build our domestic industry,
construction and a draft Battery Regulation that would ensure and Canada’s window of opportunity to enter the battery
European batteries are the cleanest in the world, the EU plans market is now. Each of the “Detroit Three” automakers have
to become entirely self-sufficient on EV batteries by 2025.6 announced major electric vehicle assembly investments in
The Government of Canada has acknowledged our Canada over the past eight months.12 President Joe Biden’s
country’s opportunity to become a global leader in the proposed $2 trillion infrastructure plan would pour US$174
production of batteries. In its strengthened climate plan, the billion into developing the EV market, including through
federal government commits to supporting the development consumer purchase incentives, a national network of half a
of a battery supply chain in Canada through a “mines to million chargers by 2030, and electrifying school and transit
mobility” approach.7 Efforts to date, including the Canadian buses.13 With known deposits of critical metals and minerals,
Metals and Minerals Plan,8 the From Mines to Mobility: responsibly produced resources, abundant clean electricity, a
What We Heard Report,9 and the Roadmap for a Renewed skilled workforce, a cutting-edge battery R&D (research and
U.S.-Canada Partnership10 are important starts. Recent development) ecosystem, and proximity to a well-integrated
investments supporting EV assembly in Ontario and battery North American market, Canada can lead on sustainable
module production in Quebec are putting Canada on the EV battery material and technology production.14
4 Turning Talk into Action
Purpose & Process
Photo credit: E-One Moli Energy Corporation
Given the strategic importance of batteries in the energy importance of groups coming together to work on solutions to
transition and the federal government’s ongoing work to fill the gaps.
develop its “mines to mobility” approach, Clean Energy
Canada saw an opportunity to contribute to these efforts. The battery dialogue was a success. Experts were encouraged
Specifically, we wanted to drive forward discussions around by the enthusiasm and level of alignment among those who
building Canada’s battery supply chain from “why we should participated and expressed interest in continuing to work
do it” to “how we should do it.” We therefore convened a together on developing Canada’s battery industry. Following
representative group of experts on the issue of building the dialogue, Clean Energy Canada staff worked with experts,
Canada’s battery supply chain in a virtual dialogue event on often one-on-one, to produce this set of priority actions to
March 30 and 31. develop the battery supply chain in Canada.
In advance of the dialogue, Clean Energy Canada: Some of the priority actions set out in this report require
government action. Other actions will require leadership
• reviewed literature on global battery supply chains and from industry, investors, and academia.
zero-emission vehicle (ZEV) trends,
While this dialogue was originally designed to focus on batteries
• interviewed participants to understand their perspectives for electric vehicles because the vast majority of lithium-ion
and test for areas of convergence, battery demand will come from transportation through 2030,15
experts recognized the broader opportunities for batteries in
• produced a discussion paper listing potential priority the energy transition. Canada’s battery supply chain should be
actions for discussion, and built with these broader opportunities in mind.
• worked to shape an effective agenda and facilitation for This report summarizes the priority actions Canada must
the dialogue event. take to build its battery supply chain and establish itself
as a player in the global battery industry. It will be shared
A pre-recorded video greeting from federal Minister of Natural
with key ministers and policymakers at the federal and
Resources Seamus O’Regan opened the roundtable. He
provincial level. We look forward to working with governments,
discussed Canada’s potential to become a global leader in
industry, and other stakeholders on advancing this topic in the
producing advanced batteries, highlighted the actions the
months ahead.
federal government has taken to date, and emphasized the
5 Turning Talk into Action
A Battery Vision for Canada
Photo credit: Automotive Parts Manufacturers’ Association
Canada has many of the ingredients needed to produce
batteries and their input materials and parts. But experts
felt that we need to better define what Canada’s battery
Future auto jobs are in batteries
opportunity actually is and set out an ambitious vision A recent Boston Consulting Group analysis comparing
to guide industrial development. The experts we convened EV and internal combustion engine (ICE) vehicle supply
jointly developed this working battery vision for Canada: chains found that labour requirements for both types of
vehicles are comparable, but because EVs have fewer
parts and are easier to assemble, the EV jobs shift to
By 2030, Canada is a global leader in different parts along the supply chain—namely, to battery
clean, innovative battery technology cell manufacturing. This means the pivot to EV production
could lead to job losses unless Canada captures jobs in the
and strategic materials production and battery supply chain.
recycling, and is a hub for sustainable
battery production in North America.16
• Helps Canada meet its climate targets (e.g. greenhouse
gas emission reduction and ZEV sales) and demonstrates
Canada has much to gain by developing a domestic battery
global climate leadership.
supply chain and positioning itself to lead in the global
battery market. Specifically, experts agreed that achieving Furthermore, opportunities to feed into the battery
the vision set out above would benefit Canada in the supply chain aren’t limited to just one or two provinces;
following ways: they exist across Canada. For instance, British Columbia
already specializes in marine vehicle battery technology.17
• Secures Canada’s competitive advantage and strategic
In Alberta and Saskatchewan, companies are developing
position in an emerging net zero global economy.
capabilities to extract lithium from oilfield wastewater brines.18
• Retains and creates good, secure and diverse jobs across Manitoba assembles zero-emission buses.19 Ontario is home
Canada. to cobalt and nickel reserves and production, a strong auto
parts sector, one of North America’s largest battery recycling
• Builds on and accelerates Canada’s cleantech leadership companies,20 and EV passenger vehicle assembly plants.21
to capture and retain robust technology R&D and high- Quebec has lithium and graphite resources, assembles
value intellectual property. electric buses and trucks, hosts one of the world’s leading
battery research labs, and is positioning itself to lead on
• Builds human and economic capital that supports the battery recycling.22 Finally, Nova Scotia is home to a world-
battery ecosystem and other sectors of the economy. renowned battery research team.23
6 Turning Talk into Action
The Major Stages along the Battery Supply Chain
Exploration Extraction Battery
Materials Battery
Components
Cell
Recycled Production
Materials
Module
Integration Production
in Vehicle
Battery
Pack
Assembly
Photo credit: Lion Electric Company
7 Turning Talk into Action
Challenges to Overcome
Despite actions taken to date, experts felt that Canada is still
a long way from a well-developed domestic battery supply
chain. These are what they see as the biggest challenges
Canada faces in building out its supply chain:
• Lots of talk, limited action: Despite being ranked
fourth in the world by BloombergNEF for its battery
supply chain potential, Canada has minimal existing or
announced manufacturing capacity.24 In fact, there is
very limited activity happening at any stage along the
supply chain. Notably, none of Canada’s mined metals
and minerals are feeding into the battery value chain.
Canada generally lacks metal refining and chemical
processing capacity related to battery grade materials.
Canada doesn’t have any significant active material
manufacturing and is not producing battery modules,
cells, or packs at commercial scale. Photo credits: Lion Electric Company
• Market challenges: Canada’s small market size makes
it challenging to scale up domestic battery supply Stellantis, and General Motors are also seen as a clear
chains and justify locating major battery manufacturing sign these companies view Canada as an attractive place
facilities here. For this reason, it will be important for to invest.
Canada to maintain close ties with the U.S. as our major
export market. A related challenge is that Canada has • In the shadow of China: China “sets the bar” on both
no domestic OEM (original equipment manufacturer) cost and time between breaking ground and getting
champion for passenger vehicles, making us wholly the first product off the assembly line. China’s years
reliant on foreign investment. On the other hand, of experience in the battery business, government
Canada does have some large, homegrown companies intervention and support, lax labour standards, and ability
assembling vehicles in other segments (e.g. Lion Electric, to flood the market with a surplus of goods to drive down
New Flyer, Taïga) and producing auto parts (e.g. Magna, commodity prices all make it very difficult to compete
Linamar) that are already pivoting into EVs.25 The nearly with on cost—especially without similar government
$6 billion in recent investments made by Ford Motor, support coming from Canada. Canada may never be able
to compete on lowest-cost and so should look to other
strengths it could market, such as ESG and lifecycle
greenhouse gas performance.
• Slow decision-making: Administrative processes,
permitting decisions, and funding allocations can have
long lead times, making Canada a hard jurisdiction to
grow in. Companies that are looking to scale up fast
and are under competitive pressure to move forward
are forced to set up shop in other countries that can
accommodate their needs—even if they were attracted
to Canada for other reasons. Beyond China, other
jurisdictions such as the U.S. are competing with Canada
for battery-related investments, too. Canada must find
a way to expedite decision-making processes while
maintaining world-leading ESG (environmental, social,
Photo credits: Lion Electric Company
8 Turning Talk into Action
and governance) standards if it wants to attract and • Limited industrial policy: Canada tends to take a more
retain companies in the battery industry. passive approach to economic development. Meanwhile,
industrial strategy has played a big role in other markets
• Lack of investment: Domestic sources of financing are such as the EU. If Canada wants to compete, it will have
limited and often focus on R&D versus commercialization. to explore similar approaches, such as an industrial
Canada has not secured enough foreign direct investment roadmap or electric mobility strategy that identifies where
to fill the gap. This is particularly the case for mining the country wants to go and how to get there.
projects, which carry higher levels of risk. Despite Canada
having reserves of these mineral resources, we’re seeing • Fast-changing, proprietary technology: Significant
no significant investments in building and bringing future resources are going into battery research and
capacity online. development right now because it’s the main way
automakers control the cost and extend the performance
• Market risk and uncertainty: The global battery range of an EV. It is challenging to build a supply chain
industry is growing fast. Uncertainty around technology, around this technology when each battery “recipe” is
investment flows, and new players entering the market unique, confidential, and quickly evolving. Increasing
make it difficult for one sector in the supply chain to scale the supply of one critical input may benefit one battery
up without similar actions occurring up- and downstream. technology but not another. Alternatively, by the time
This challenge weighs in favour of an approach that supply of that input gets to market, the latest battery
builds out various parts of Canada’s battery supply chain technology may no longer need it. These challenges make
simultaneously, similar to the way “hydrogen hubs” are a one-size-fits-all strategy more difficult to land on, unless
being used in Canada to address related challenges Canada narrows in on certain materials and components
by bringing together and aligning supply chain players that are used by a broader range of buyers, for example
with end users. If mining companies see there will be a lithium or nickel.
market for their products, it helps alleviate the risks, and
if battery cell producers know they’ll have a secure supply
of raw materials, they’ll be more likely to locate their
facilities here.9 Turning Talk into Action
Focusing on Priority Actions
Photo credit: Lion Electric Company
The experts were clear: If Canada wants to compete on and in a coordinated way. Finally, the secretariat would
batteries, from raw materials extraction to battery cell liaise with industry, communicating government efforts and
production, it must move swiftly and ambitiously. They outcomes regularly.
identified the following no-regrets priority actions Canada must
take in the immediate-term to establish itself as a player in the
global battery industry.
2. Immediately convene a Canadian battery
task force
Form an intergovernmental battery
1. secretariat
Experts emphasized that Canada’s battery supply chain
efforts must be coordinated with the U.S., as contemplated in
the 2021 Roadmap for a Renewed U.S.-Canada Partnership,26
Federal and provincial government efforts to build parts of but agreed that Canada must first get its own “ducks in a
Canada’s battery supply chain have not been well-coordinated row” to strengthen its bargaining power. To lead this effort,
to date. To break down silos across government and better an industry-led, government-supported task force must be
coordinate programs, policies, and investments, a federal- convened immediately to advance work through the summer
provincial battery secretariat must be formed. and deliver advice to governments on how to develop
Canada’s battery industry by the end of 2021. The task force
The secretariat would bring together ministers and key must be made up of key players along the battery supply chain
department staff from federal and provincial governments. At plus leaders from Canadian financial institutions, and it must
the federal level, the secretariat must include representatives liaise with the intergovernmental battery secretariat described
from Innovation, Science and Economic Development; Natural above. Its deliverables would be to:
Resources Canada; Environment and Climate Change;
Transport Canada; Finance; and Global Affairs. Experts felt • To quantify Canada’s battery opportunity (both domestic
that leadership at the cabinet committee level would elevate and export potential).
building the battery supply chain as part of a key economic
strategy for Canada’s auto, mining, and manufacturing • Articulate a clear value proposition for policymakers,
sectors. Provincial representatives must also be involved. The investors, and trading partners (jobs, economic
secretariat would enable decision-makers across departments development, ESG credentials, low-carbon
and levels of government to act quickly, nimbly, proactively, competitiveness).10 Turning Talk into Action
• Determine how much capital is needed to support scaling
up and where along the supply chain those investments
are needed.
• Develop an action plan that includes: (i) identifying key
gaps in the supply chain that need to be addressed;
(ii) determining top priorities for industrial development;
and (iii) setting targets for investment and production
capacity.
Once government and industry stakeholders across the supply
chain are aligned and clear on what Canada brings to the
table, Canada will be in a stronger position to engage with the
U.S. on creating a North American Battery Alliance.
Some experts noted the ongoing development of a ZEV supply
chain alliance in Canada and suggested this could be a
forum for Canadian battery industry stakeholders to continue Photo credit: Lion Electric Company
collaborating. Others around the table showed interest in this
idea. Whichever forum is selected, the key will be to ensure
the task force can move quickly and effectively in advancing CASE STUDY
its work and delivering advice.
EU Battery Alliance
Develop a North American Battery
3. Alliance
The European Battery Alliance gathers the European
Commission, interested EU countries, investment
institutions, and key industrial, innovation, and
Canada may be a relatively small market on its own, but the academic stakeholders. The network is managed by
integrated nature of North American vehicle supply chains EIT InnoEnergy, a European company supported by the
comes with considerable advantages. Canada and the European Institute of Innovation and Technology. The
U.S. already have a Joint Action Plan on Critical Minerals, EBA’s goal is to “create a competitive and sustainable
which “sets the baseline for prioritizing domestic and North battery industry in Europe by 2025 to capitalize on
American production of metals and minerals required for opportunities and capture a new market worth €250
the clean economy.” In the February 2021 Roadmap for a billion per year.” Since its launch in 2017, the EBA has:
Renewed U.S.-Canada Partnership, Trudeau and Biden agreed
to strengthen this Joint Action Plan and work together in • Put forward over €6 billion to build out Europe’s EV
building the necessary supply chains so that both countries battery supply chain through to 2031.
can lead on battery development and production.27 To this
end, experts were adamant that Canada must do more than • Supported industrial projects across the value chain
extract raw materials and supply them to the U.S. Rather, in 22 countries.
Canada must position itself to supply the growing North • Dramatically increased Europe’s market share of
American market with batteries and their input materials advanced lithium-ion batteries.
and parts.
• Helped Europe surpass China as the world’s leading
The federal government must build on these efforts and work EV market.
with the U.S. to create a North American Battery Alliance
that leverages the integrated market and ensures both In 2020, the EU proposed a Batteries Regulation that
countries are committed to working together in developing an focuses on (1) carbon footprint labelling, (2) ethical
industrial strategy for batteries that is competitive with the sourcing of raw materials, and (3) recycling criteria.
EU. Similar to the EU Battery Alliance, the North American11 Turning Talk into Action
Battery Alliance would connect players along the battery generating this information, a working group including
supply chain, raise the profile of the battery industry, and industry associations such as the Mining Association of
drive capital investment. It must include senior leaders from Canada, Battery Metals Association of Canada, Propulsion
government, finance, and industries across the supply chain Quebec, Canadian Vehicle Manufacturers’ Association,
who are committed to putting resources into this initiative. and Automotive Parts Manufacturers’ Association should
It must also focus on getting capital investment flowing by be convened to exchange information on the state of
including an investment platform to accelerate transactions upstream material supply and downstream customer
between members, or a buyer-supplier network to foster needs. A similar conversation could take place with U.S.
dialogue and connect buyers with budding suppliers looking buyers through a North American Battery Alliance. Better
for contracts. Finally, the North American Battery Alliance data and transparency will help governments, industry
should follow the EU’s example and focus on sustainability and investors make informed decisions and determine
as its competitive advantage compared to Asia. The Global what can be sourced from Canada versus what must be
Battery Alliance’s Battery Passport project could be leveraged imported from other countries.
to ensure traceability, transparency, and high ESG standards
along North American supply chains. To capture a piece of the b. Develop a Battery Metals and Materials Action Plan
fast-growing global market, Canada and the U.S. should form for the mining industry that allows it to sustain and expand
this alliance within the next year. EV mineral and metal production and processing while
decarbonizing and supporting world leading sustainability
criteria. The plan should also focus on establishing and
4. Unlock Canada’s sustainable battery
metals, minerals, and materials supply
scaling up a secure, complete, and sustainable critical
minerals supply chain here in Canada. We must ensure
Canadian companies have access to strategic materials
Canada’s access to metal and mineral resources is a key and minerals for economic, environmental, geopolitical,
strength and one of the major value propositions the country and national security reasons. Efforts set out in the plan
can highlight for global companies and investors to attract should also align with projected battery technology trends,
battery-related investment. To maximize this potential, which will see increased demand for nickel.
Canada must:
c. Create a Clean Capital Plan for Critical Minerals to
a. Improve supply chain data and transparency. It is accompany the action plan and get clean investment
well-understood that Canada has reserves of metals moving into Canadian mining projects. The capital plan
and minerals that go into batteries, but details beyond should focus on: facilitating the discovery of new battery
that are limited. Industry and investors need more metal and mineral deposits through geological mapping
information on what portion of these reserves will feed and a supplemental mineral exploration tax credit;
into the battery supply chain and within what timeline expanding mineral resource assessments; de-risking new
these will become available. They would also benefit from projects until they can reach operational independence;
a map of Canada’s processing capabilities, supply chain supporting demonstration-scale processing facilities; and
gaps, and planned investments to fill them. To support scaling up successful demonstration projects. Government
the government in prioritizing these investments and12 Turning Talk into Action
efforts must focus on attracting green capital from foreign refine, and produce battery-grade cobalt and nickel sulphate,
investors, including U.S. investors. If Canada is going to coated-SPG, and lithium hydroxide at commercial scale.
supply secure, sustainable, and ethical mineral resources Doing so would secure the upper part of the supply chain and
to the U.S., this should come with financial support. As an feed into electrode (i.e. cathode and anode) as well as cell
example, Sweden has successfully secured investments manufacturing in Canada.
from other countries like Germany to support its mining
projects. Finally, federal and provincial governments should also
engage with cathode and other active material manufacturers
d. Establish an off-grid electrification fund that supports such as BASF and Umicore to understand what they would
mine electrification where possible and accelerates the need to set up a plant here. With only three plants in all of
development of other technologies such as hydrogen and North America currently making cathodes, there is a market
small modular reactors to deploy when grid connection is opportunity to fill—especially when it comes to nickel-rich
not an option. cathodes. A nickel-rich cathode manufacturing plant would
also provide a direct client for Canadian mining and recycling
e. Accelerate project permit timelines while still ensuring companies, supporting both upstream and downstream
Canada is meeting the highest environmental, social, and supply chain development.
governance standards, including Indigenous consultation
and partnership.
Launch a dedicated battery supply
Ramp up Canada’s midstream supply 6. chain fund
5. chain capacity The federal government has announced an $8-billion Net-
Zero Accelerator Fund, a portion of which will go to battery
Key stages of the supply chain exist in between raw materials supply chain development.30 While experts welcome all
and battery integration into vehicles—namely, refined and forms of government support for batteries, they agreed that
precursor materials and components and active materials. this is not the right funding mechanism to solve the battery
These are big supply chain gaps for Canada. Precursor supply chain challenges Canada faces. The amount of money
materials such as coated spherical purified graphite (coated- earmarked for batteries is also insufficient given the scale of
SPG), lithium carbonate and hydroxide, nickel-cobalt sulphate, this opportunity and the speed at which other countries are
and components like cathodes and anodes are some of moving to capture it.
the highest-value components along the battery supply
chain. Benchmark Minerals Intelligence, an independent The federal government must create a $15 billion battery
Price Reporting Agency, has stated that Canada’s biggest supply chain fund dedicated to addressing challenges and
opportunity for value generation is not in battery or EV investing in strategic projects along the Canadian value
production, but in developing the midstream supply chains chain. The fund must be carved out specifically for the
that feed into regional manufacturers like the Detroit Big batteries versus being another stream within the Strategic
Three.28 Experts agreed that Canada must build capacity in Innovation Fund. The fund must be nimble and responsive
these areas—and fast. to break down barriers along the supply chain—whether
it’s completing a low-cost feasibility study or tackling
Canada should start with a scan of current activities and bigger questions requiring large investments, such as how
capacity in these stages of the battery supply chain, followed Canada produces nickel sulphate at scale. It must use
by an assessment of where it is best positioned to compete. public funds to leverage private capital and enable public-
It may be necessary to develop domestic processing and private-partnerships. Experts suggested a “challenge fund,”
refining capabilities using imported materials while building which can be useful to solving problems the government
out Canadian production capacity for critical battery minerals doesn’t yet have answers to by asking the private sector to
and metals, similar to what the EU is doing.29 The $36.8 bring solutions forward as part of their applications. The
million proposed in the 2021 federal budget for federal R&D challenge must be designed with input from industry and
to advance critical battery mineral processing and refining be outcome-based. Finally, the fund must be accessible and
expertise offers some support for early-stage activities. But administered expediently (something the existing Strategic
in the near- to medium-term, Canada should aim to extract, Innovation Fund has historically struggled with).13 Turning Talk into Action
7. Better promote Canada’s clean and
responsible battery brand
markets. Canada’s responsibly sourced resources and
clean electricity grid give it a further competitive edge as
automakers increasingly look to source ethical materials
Canada will not be able to compete with China in offering the and reduce emissions across the lifecycle of the vehicles
lowest battery and material costs, but we have plenty of other they produce. 32
competitive advantages to attract global auto and battery
companies—namely security, stability, and sustainability. Experts stated that federal and provincial governments need
Proximity to critical metal and mineral reserves is a big to take a more proactive approach to securing investment
advantage as EV and battery companies move to localize and attracting OEMs and tier 1 battery producers to locate
supply chains, decrease the distance heavy batteries need to their facilities here. They must start by defining Canada’s
travel, and vertically integrate to drive down production costs.31 full value proposition, including responsibly mined resources
with Indigenous equity and approval, proximity to the U.S.,
With an abundance of raw metals and minerals, proximity a cutting-edge battery research and recycling ecosystem,
to the growing U.S. EV market, and more stringent rules and the low-carbon advantage that comes with abundant
governing tariff-free auto trade in North America under the clean electricity. Sweden, a country with strengths similar
Canada-U.S.-Mexico Agreement, Canada has a lot to offer to Canada’s, has done this effectively in its strategy for a
foreign investors looking to get a foothold in North American sustainable battery value chain.
The federal government must then develop a branding and
marketing strategy to better highlight Canada’s clean and
CASE STUDY
responsible battery brand—not only to sell to Canadians,
but also to market abroad and to downstream buyers.
Sweden, Strategy for a Government departments like Global Affairs Canada and
Sustainable Battery Value Chain Natural Resources Canada, plus agencies like Invest Canada
and Export Development Canada, would be well-positioned to
Sweden’s strategy for a sustainable battery value take the lead on this effort.
chain seeks to take advantage of the country’s
existing strengths: access to raw materials,
processing and refinement capacity, battery
cell production and recycling (Northvolt), auto
manufacturing (Volvo, Skania), research capacity,
8. Create a Battery
Centre of Excellence
cheap and fossil-free electricity, and proximity to Canada is already a leader in battery technology and R&D.
a large and growing European market. Sweden’s The University of Toronto has its own EV research centre,
mining industry has remained competitive with lower- which specializes in autonomous EV development as well as
cost jurisdictions due to innovations in technology designing new battery technology.33 Tesla has built a battery-
and business models, differentiating by operating related research and development centre at Innovacorp’s
in ‘premium’ segments of commodity markets. Technology Innovation Centre in Dartmouth, Nova Scotia,
Sweden’s mines are generally low-emission, with and signed a five-year research agreement with Jeff Dahn,
many existing processes and operations electrified, a Dalhousie University professor and research pioneer on
and the sector has a target of net-zero emissions by lithium-ion batteries.34 Hydro-Québec’s Center of Excellence in
2045. Initiatives to further reduce emissions include Transportation Electrification and Energy Storage is a world-
electrification of mining equipment and longer-term class innovation hub for battery materials and home of key
projects to decarbonize downstream processing (e.g. patents used worldwide in lithium iron phosphate cathodes
HYBRIT in iron ore and steel, Cementa in cement). and solid-state batteries.35 Where Canada falls short, however,
Sweden has also established close connections with is on converting battery-related technology and R&D into mass
neighboring countries such as Finland for upstream production and manufacturing.
supplies and Germany for downstream buyers, as Experts want a government-funded, industry-led Centre of
exemplified by the Northvolt-Volkswagen partnership Excellence focused on commercializing advanced battery
established in 2019. technology and manufacturing R&D. The centre would14 Turning Talk into Action
cluster university researchers, mining companies, battery
manufacturers, and auto OEMs into one hub to support
testing, demonstration, and the commercialization of new CASE STUDY
technologies. An industry-led centre will ensure success is
defined as the creation of intellectual property, economic UK Battery Industrialisation
value, and technology leadership, as opposed to academic Centre
publications.
The £130-million UK Battery Industrialisation Centre
The Centre of Excellence should have at least three focus links promising early-stage battery technologies with
areas: successful mass production. It is a publicly funded
battery product development facility that brings
a. Next generation battery technologies: While lithium-
manufacturers, entrepreneurs, researchers, and
ion batteries are the predominant battery type being
educators together to commercialize technologies
deployed now, there are other technologies currently in
central to the development and manufacture of
development with greater ranges and energy intensities—
batteries. The centre helps companies scale up and
such as solid-state batteries—that will come to dominate
move into high-volume battery and EV production. It is a
in the next 30 years. Canada is already home to Blue
key part of the Faraday Battery Challenge—a government
Solutions Canada, one of the first companies in the world
program to fast track the development of cost-effective,
to produce solid-state batteries for commercial use.36
high-performance, and recyclable batteries—and
Large-scale verification and commercialization of this
supports the U.K.’s mobility industrial strategy.
technology through the Centre could help companies like
Blue Solutions move into mass production.
b. Advanced battery manufacturing: In addition to Excellence can be a hub for new manufacturing know-how
technology, the centre should also focus on the and a testing ground before investment is made in full-
development of advanced battery manufacturing scale production equipment.
techniques to support manufacturers. Batteries
are becoming larger and more complicated. Each c. Battery recycling: Canada is home to some of the leading
of the manufacturing processes needs to be fine- and largest battery recycling companies in North America.
tuned for high-speed manufacturing. The Centre of Battery design currently considers ways to maximize
energy density, range, and performance, while minimizing
cost. The ease and efficiency with which a battery can be
recycled should also be optimized during the battery design
stage.37 The Centre of Excellence could bring researchers
and battery recycling companies together to find ways to
maximize battery recyclability in battery design.
Finally, the Centre of Excellence must build on existing
national and provincial efforts. For instance, Quebec’s Smart
and Electric Mobility Innovation Hub brings together battery-
related industrial, academic, and institutional partners to
focus on industrial ecosystem growth.38 Saskatchewan’s
Research Council is developing Canada’s first Rare Earth
processing facility.39 The National Research Council of Canada
hosts a pilot-scale battery manufacturing line facility in
Boucherville, Quebec, that supports new battery technology
development and de-risking.40 It also runs a LiBTec industrial
R&D group aimed at developing the Canadian supply chain
Photo credit: Lithion Recycling15 Turning Talk into Action
in value-added graphite and lithium materials, specifically for Existing federal incentive programs to make EVs more
lithium-ion battery applications.41 affordable for Canadians and efforts to date to build out a
public charging network are a good start. But Canada must
Grow demand for batteries in do more to catch up to its international peers. Experts did
9. North America
not align on the best way to grow the market for EVs in North
America, but many discussed the need to accelerate adoption
Rather than seeking to build an advanced battery industry and in different vehicle segments and provide market certainty
supply chain in North America while demand for lithium-ion for businesses and investors. A Canadian ZEV Market
batteries is still centered off-shore, Canada must also support Development Strategy that bridges policies for deployment
the growth of a robust domestic EV market and ensure there is (such as EV purchase incentives) with charging infrastructure
sufficient demand for EVs, batteries, and their input materials needs and economic development opportunities in the North
and parts in North America. EV uptake in North America trails American market could effectively pull the pieces together.
other markets like the EU and China. While EVs currently Some experts stressed the need to make sure Canadian
make up 2-3% of all new passenger vehicles sold in Canada producers are meeting the growing demand by implementing
and the U.S. today, other countries are seeing market shares “Buy Clean” provisions or other policies that encourage
in the double digits.42 vehicles and components to be produced with the least
amount of carbon emissions possible.4316 Turning Talk into Action
Next Steps
Photo credit: Lion Electric Company
Canada has a chance to establish itself as a The priority actions outlined in this report are among
major player in the global battery industry, but the most important and immediate actions Canada
we must act fast to seize this opportunity. If we must take to advance as a leader in the production of
don’t, other countries will fill the gap in meeting the battery materials and technology.
growing demand for EVs and secure the advanced
manufacturing jobs, intellectual property, and other We applaud the Government of Canada for its
economic gains that come with it. Developing commitment to supporting the development of a
Canada’s battery supply chain and manufacturing domestic battery supply chain. We look forward to
capacity will anchor our existing auto sector, contributing further ideas to the design of specific
ensure we capture the jobs and value created in policies, programs, and initiatives within
the transition to electric vehicles, and support the and outside of government as they take shape.
growth of new jobs and industries in the clean
energy economy.17 Turning Talk into Action
Endnotes
1. The International Council on Clean Transportation. How Technology, Canada and the U.S. as “global leaders in all aspects of battery
Recycling, and Policy Can Mitigate Supply Risks to the Long-Term development and production.” Prime Minister of Canada. Roadmap
Transition to Zero-Emission Vehicles. (2020). http://www.zevalliance. for a Renewed U.S.-Canada Partnership. (2021). https://pm.gc.ca/
org/wp-content/uploads/2020/12/zev-supply-risks-dec2020.pdf en/news/statements/2021/02/23/roadmap-renewed-us-canada-
partnership
2. Global Lithium-Ion Battery Market Is Projected To Exceed $129 Billion
By 2027. Bloomberg (2021). https://www.bloomberg.com/press- 11. Governments Unveil Details of $590M Investment to Help Ford
releases/2021-03-17/global-lithium-ion-battery-market-is-projected- Oakville Plant Make Electric Cars. CBC News (2020). https://
to-exceed-129-billion-by-2027; Roots Analysis. Automotive Lithium-ion www.cbc.ca/news/business/ford-oakville-government-1.5754974;
Battery Market: Global Opportunity and Trend Analysis, 2019-2030. Szymkowski, S. FCA Has a New Flexible Electrified Platform on the
(2019). https://www.rootsanalysis.com/reports/view_document/ Way. Road Show (2020). https://www.cnet.com/roadshow/news/
automotive-li-ion-batteries-market/273.html fca-ev-platform-canada-unifor/; Wang, K. GM Canada Reaches $1B
Tentative Deal for Electric Vehicle Manufacturing at Ingersoll CAMI
3. World Bank Group. Minerals for Climate Action: The Mineral Intensity Plant. Global News (2021). https://globalnews.ca/news/7580711/
of the Clean Energy Transition. (2020).http://pubdocs.worldbank.org/ gm-canada-cami-ingersoll-unifor/; Lion Electric Announces the
en/961711588875536384/Minerals-for-Climate-Action-The-Mineral- Construction of its Battery Manufacturing Plant and Innovation Center
Intensity-of-the-Clean-Energy-Transition.pdf in Quebec. CISION (2021). https://www.newswire.ca/news-releases/
lion-electric-announces-the-construction-of-its-battery-manufacturing-
4. Scheyder, E. and Lewis, J. U.S. looks to Canada for minerals to build plant-and-innovation-center-in-quebec-826634300.html; Government
EVs, report says. Automotive News (2021). https://www.autonews. of Canada. Budget 2021: A Recovery Plan for Jobs, Growth, and
com/regulation-safety/us-looks-canada-minerals-build-evs-report- Resilience. (2021). https://www.budget.gc.ca/2021/home-accueil-
says; European Commission. Critical Raw Materials Resilience: en.html. The 2021 federal budget contained multiple battery-
Charting a Path Towards Greater Security and Sustainability. related items, including: (i) an additional $5 billion for the Net-Zero
(2020). https://eur-lex.europa.eu/legal-content/EN/TXT/ Accelerator Fund (for a total of $8 billion), which will help industries
PDF/?uri=CELEX:52020DC0474&from=EN like auto and mining decarbonize and foster the development of
key supply chains like battery supply chains; (ii) 50% tax break for
5. Petrequin, S. EU Approves More State Aid to Boost Car Batteries
businesses that manufacture zero-emission technologies, such
Industry. CTV News (2021). https://www.ctvnews.ca/autos/eu-
as ZEVs and batteries; (iii) $9.6 million to create a Critical Battery
approves-more-state-aid-to-boost-car-batteries-industry-1.5283043;
Minerals Centre of Excellence at Natural Resources Canada, which
International Energy Agency. Global EV Outlook 2021. (2021). https://
will coordinate federal policy and programs on critical minerals, work
www.iea.org/reports/global-ev-outlook-2021; Miller, J. Europe eclipses
with provincial, territorial, and other partners, and help implement the
China in electric vehicle investment. Financial Times (2020). https://
Canada-U.S. Joint Action Plan; and (iv)$36.8 million for federal R&D to
www.ft.com/content/aeb8f9a1-68ba-4281-b1f4-107b2f5ed129
advance critical battery mineral processing and refining expertise.
6. EU Says It Could Be Self-Sufficient in EV Batteries by 2025.
12. Irwin, J. Canada Envisions an EV Battery Corridor. Automotive
Automotive News Europe (2020). https://europe.autonews.com/
News. (2021). https://www.autonews.com/manufacturing/canada-
suppliers/eu-says-it-could-be-self-sufficient-ev-batteries-2025
envisions-ev-battery-corridor
7. Environment and Climate Change Canada. A Healthy Environment
13. White House. Fact Sheet: The American Jobs Plan. (2021).
and A Healthy Economy. (2020). https://www.canada.ca/content/
https://www.whitehouse.gov/briefing-room/statements-
dam/eccc/documents/pdf/climate-change/climate-plan/healthy_
releases/2021/03/31/fact-sheet-the-american-jobs-plan/
environment_healthy_economy_plan.pdf
14. Benchmark Mineral Intelligence to Appear Before Canada’s House
8. Mines Canada. The Canadian Minerals and Metals Plan. (2020).
of Commons to Speak on Electric Vehicle and Battery Supply
https://www.minescanada.ca/en/content/action-plan-2020-fall-
Chains. Globe Newswire (2021). http://www.globenewswire.com/
update
news-release/2021/02/19/2178919/0/en/Benchmark-Mineral-
9. Government of Canada. From Mines to Mobility: Seizing Opportunities Intelligence-to-appear-before-Canada-s-House-of-Commons-to-speak-
for Canada in the Global Battery Value Chain. (2020). https:// on-electric-vehicle-and-battery-supply-chains.html
tartisannickel.com/bosupsoa/2020/11/What-We-Heard-Report.pdf
15. The International Council on Clean Transportation. How Technology,
10. In the Roadmap for a Renewed U.S.-Canada Partnership, released in Recycling, and Policy Can Mitigate Supply Risks to the Long-Term
February 2021, Prime Minister Trudeau and President Biden agreed Transition to Zero-Emission Vehicles. (2020). http://www.zevalliance.
to strengthen the existing Canada-U.S. Critical Minerals Action Plan org/wp-content/uploads/2020/12/zev-supply-risks-dec2020.pdf;
and work together in building the supply chains needed to position U.S. Department of Energy. Energy Storage Grand Challenge: Energy18 Turning Talk into Action
Storage Market Report. (2020). https://www.energy.gov/sites/prod/ 27. Prime Minister of Canada. Roadmap for a Renewed U.S.-
files/2020/12/f81/Energy%20Storage%20Market%20Report%20 Canada Partnership. (2021). https://pm.gc.ca/en/news/
2020_0.pdf; BloombergNEF. Electric Vehicle Outlook 2020. (2020). statements/2021/02/23/roadmap-renewed-us-canada-partnership
https://about.bnef.com/electric-vehicle-outlook/
28. House of Commons Standing Committee on Natural Resources.
16. The term “clean” would include “sustainable and responsibly- Study on Critical Minerals and Associated Value Chains in Canada.
produced.” (Evidence from Monday, February 12, 2021). https://www.
ourcommons.ca/DocumentViewer/en/43-2/RNNR/meeting-13/
17. Corvus Energy. https://corvusenergy.com/ evidence
18. E3 Metals Corp. https://www.e3metalscorp.com/; Prairie Lithium. 29. EBA250 Priority Actions. European Battery Alliance https://www.
https://www.prairielithium.ca/ eba250.com/actions-projects/priority-actions/ (2021); The EU
Commission’s Action Plan for Critical Raw Materials discusses the
19. NFI Group. https://www.nfigroup.com/ dual approach of expanding raw material extraction and processing
in the EU while sourcing sustainable, responsibly-produced
20. Li-Cycle to Build New Lithium-Ion Battery Recycling Facility in Arizona.
materials from outside the EU. European Commission. Critical Raw
Business Wire (2021). https://www.businesswire.com/news/
Materials Resilience: Charting a Path Towards Greater Security and
home/20210414005238/en/Li-Cycle-to-Build-New-Lithium-Ion-
Sustainability. (2020). https://eur-lex.europa.eu/legal-content/EN/
Battery-Recycling-Facility-in-Arizona
TXT/PDF/?uri=CELEX:52020DC0474&from=EN
21. Layson, G. Windsor, Ont., Eyes $2B EV Battery Plant as Province Aims
30. Environment and Climate Change Canada. A Healthy Environment
to Be Electric ‘Hub of the Future.’ Automotive News Canada (2021).
and A Healthy Economy. (2020). https://www.canada.ca/content/
https://canada.autonews.com/electric-vehicles/windsor-ont-eyes-2b-
dam/eccc/documents/pdf/climate-change/climate-plan/healthy_
ev-battery-plant-province-aims-be-electric-hub-future
environment_healthy_economy_plan.pdf; Government of Canada.
22. Propulsion Québec. Lithium-Ion Battery Sector: Developing Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience.
a Promising Sector for Quebec’s Economy. (2019). https:// (2021). https://www.budget.gc.ca/2021/home-accueil-en.html
propulsionquebec.com/wp-content/uploads/2019/09/RAPPORT-
31. Lithium-ion battery costs have fallen 90% over the past ten years.
BATTERIES-LITHIUM-ION-EN-2.pdf?download=1
Battery Pack Prices Cited Below $100/kWh for the First Time in 2020,
23. Innovacorp. https://innovacorp.ca/companies/tesla; MacQueen, C. While Market Average Sits at $137/kWh. BloombergNEF https://
Advanced Battery Scientists Join Exclusive Tesla Partnership at Dal about.bnef.com/blog/battery-pack-prices-cited-below-100-kwh-for-the-
in Research Chair Roles. Dalhousie University https://www.dal.ca/ first-time-in-2020-while-market-average-sits-at-137-kwh/ (2020). The
news/2021/01/19/advanced-battery-scientists-join-exclusive-tesla- industry is reaching a point where technology and scale are no longer
partnership-at-.html (2021). responsible for higher costs; now it is the complexity of global battery
supply chains and high costs of shipping to different jurisdictions
24. Canada Ranked 4th, US 6th in Lithium-Ion Battery Supply Chain. at each stage. Tesla’s 2020 Battery Day theme was “vertical
Mining.com (2020). https://www.mining.com/new-ranking-has- integration”—that is, co-locating multiple parts of the supply chain in
canada-4th-us-6th-in-lithium-ion-battery-supply-chain/; Stringer, one location, from raw material extraction to cathode manufacturing
D and Rathi, A. Are Batteries the Trade War China’s Already Won? to battery and EV production. Tesla is already owning most of its
Bloomberg Green (2020). https://www.bloomberg.com/news/ supply chains. Holzman, J. Tesla Role in Goro Nickel Mine Paves Path
articles/2020-09-16/are-batteries-the-trade-war-china-s-already- to Vertically Integrated Supply Chain. S&P Global Market Intelligence
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latest-news-headlines/tesla-role-in-goro-nickel-mine-paves-path-to-
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EVs. Automotive News Canada (2021). https://canada.autonews. by partnering with Northvolt and Umicore, is similarly working to
com/suppliers/magna-plans-expand-manufacturing-north-america- “penetrate all aspects of the battery cell value chain, from selection of
focus-evs materials, to battery cell composition and design, all the way to near-
standard production and recycling.” From Raw Material to Recycling:
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Canada Partnership. (2021). https://pm.gc.ca/en/news/ BMW Group https://www.press.bmwgroup.com/global/article/detail/
statements/2021/02/23/roadmap-renewed-us-canada-partnership T0312348EN/from-raw-material-to-recycling:-bmw-group-develops-
sustainable-material-cycle-for-battery-cells?language=en (2020).You can also read
